Review of Performance Appraisal Systems With Special Emphasis on Case Studies of Private Companies

The performance appraisal is the process of assessing employee performance by way of comparing present performance with already established standards which have been already communicated to employees, subsequently providing feedback to employees about their performance level for the purpose of improving their performance as needed by the organization. As mentioned above the very purpose of performance uprising is to know performance of employee, subsequently to decide whether training is needed to particular employee or to give promotion with additional pay hike. Performance appraisal is the tool for determining whether employee is to be promoted, demoted or sacked in case of very poor performance and no scope for improvement. Every corporate sector uses performance appraisal as a tool for knowing about the employee and take decisions about particular employee. Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. Performance appraisal is generally done in systematic ways which are as follows: 1. The supervisors measure the pay of employees and compare it with targets and plans. 2. The supervisor analyses the factors behind work performances of employees. 3. The employers are in position to guide the employees for a better performance. The study by Eleni T. Stavrou, Christakis Charalambous and Stelios Spiliotis [1] utilizes an innovative research methodology (Kohonen’s Self-Organizing Maps (SOMs), Neural Network Analysis) to explore the connection between human resource management as a source of competitive advantage and perceived organizational performance in the European Union’s private and public sectors. While practices in these two sectors did not differ significantly, three diverse but overlapping HRM models did emerge, each of which involved a different set of EU member states. Training & Development practices were strongly related to performance in all three models and Communication practices in two. These results show the usefulness of an innovative technique when applied to research so far conducted through traditional methodologies, and brings to the surface questions about the universal applicability of the widely accepted relationship between superior HRM and superior business performances. While new to the field of human resource management, this methodological approach has been used successfully across different disciplines and lines of research (Moreno et al., 2006; Deichmann et al., 2003; Veiga et al., 2000; Smith, 1999; Mazanec, 1995). Self-Organizing Maps (SOMs) belong to the broad category of unsupervised neural networks and the basic idea behind them is original data, while avoiding creating artificial clusters (Deichmann et al., 2003; Mazanec, 1995). SOMs have additional advantages which make them appropriate in the current study. First, they are able to outperform the traditional data reduction and clustering techniques, in both speed and quality of solution (Smith, 1999). Second, they have the capacity to operate on very large samples and need no a priori assumptions about the distribution of the sample (Deboeck and Kohonen, 1998). Using SOMs helps overcome structuring task problems associated with finding the appropriate underlying distribution and the functional form of the underlying data.

Performance Appraisal can be done with following objectives in mind: 1. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc. 2. To identify the strengths and weaknesses of employees to place right men on right job. 3. To maintain and assess the potential present in a person for further growth and development. 4. To provide a feedback to employees regarding their performance and related status. 5. To provide a feedback to employees regarding their performance and related status. 6. It serves as a basis for influencing working habits of the employees. 7. To review and retain the promotional and other training programmes.

It is said that performance appraisal is an investment for the company which can be justified by following advantages: 1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case. 2. Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority. 3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes. 4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard. 5. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways: a. Through performance appraisal, the employers can understand and accept skills of subordinates. b. The subordinates can also understand and create a trust and confidence in superiors. c. It also helps in maintaining cordial and congenial labour management relationship. d. It develops the spirit of work and boosts the morale of employees. All the above factors ensure effective communication. 6. Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future.

Bharti Airtel was the first telecom company to have an All-India footprint by covering all the 23 telecom circles of India. It was one of the five largest companies in India in terms of the market capitalization and the flagship organization of Bharti Enterprises, one of India’s leading business groups with diverse interests

terminals.

PROBLEMS

The Performance appraisal form of each employee passes through a number of heads and needs to be signed and rechecked by a number of VP‘s, which may create lot of confusion and waste large amount of time. The appraisal comprises of lot of comments and remarks by various heads and VP’s rather than simple grading on the basis of points, which is not so practical and convenient in evaluating. The appraisal system is done yearly and not quarterly. Rewards based on appraisal system are given only occasionally which hampers the motivation of the employees. Employees don’t get feedbacks properly as a result they can’t work properly on it.

RECOMMENDED SOLUTION:

Broader HRD base: One other thing to be noted is that there is only one HRD office for the whole organization, which is not sufficient enough. The company should have a few more of these department controls set up to make it reachable to every employee of the organization. The appraisal system should be done on half yearly basis that is at least one appraisal system in every 6 months. This helps the employees to keep a track of their own performance also. The rewards based on appraisal system should be given often and regularly; this gives motivation to the employees. The rewards should be given either in monetary basis or reward basis. Appraisal should be done by the very next boss. If the VP’s do the appraisal system in many cases it is found that they are not fully aware of the person’s performance.

In this paper we found that performance appraisal is the practice of actively using performance data to improve an organization’s performance as well as employee motivation. we found that this practice involves strategic use of performance measures and standards to establish performance targets and goals, reports on the success in meeting performance goals, and to improve the overall quality of work in any organization.

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